money matters part 2 – loan repayment · money matters part 2 – loan repayment angela moore |...
TRANSCRIPT
MONEYMATTERSPART2–LOANREPAYMENT
AngelaMoore|FinancialAidCoordinator,CollegeofVeterinaryMedicine
LOANR
EPAYMEN
TWetalkedlastDmeaboutminimizingyourdebtloadwhileyou’reinschool…Butwhatabouta*erschool?!Thatdebthastobepaidbacksomehow!
Don’tpanic!YouhaveLOTSofopAons!
LOANR
EPAYMEN
TBASICS
BasicsofLoanRepaymentNSLDS.gov–RecordofyourenDrefederalloanhistoryandwhoyourloanservicer(s)is(are)
• Lookcarefully-YoumayhavemulDpleservicers!FederalDirectLoanservicers-
• FedLoanServicing• Nelnet• Navient• GreatLakes• CornerStone• GraniteState• HESC/Edfinancial• MOHELA• OSLAServicing
Federally-fundedloansadministeredbyUF(Perkins,HPSL,LDS,etc.)-• ServicerisHeartlandECSI–www.ecsi.net
LOANR
EPAYMEN
TBASICS
Remember-Yourloanservicerisyourfriend!
• “AservicerisacompanythatworksonbehalfofDOEtocollectpayments,respondtocustomerserviceinquiries,andperformotheradministraDvetasksrelatedtoyourfederalstudentloans”*
• TheservicerisNOTadebtorbillcollector• Yourservicer’spurposeistoassistyouinrepayingyourdebtandstaying
outofdelinquency/default• Ifyourservicercommunicateswithyou,don’tignoreit!
To-DoItems-• Setupanonlineaccountwitheachofyourservicers
• Manytaskscanbecompletedonline• Easywaytotrackyourloanbalance,payments,etc.• Mobileappmayalsobeavailable
• KeepyourcontactinformaDoncurrent!• YoucouldmissimportantcommunicaDonsfromyourservicerifthey
can’treachyou• Easytoforgetwhenrepaymentstartswithoutareminder
*AsdefinedbyFederalStudentAid
QUICKN
OTE–P
RIVATELOAN
SPrivateLoans(a.k.a.,AlternaAveLoans)
• Loansmadebyaprivatelender(i.e.,WellsFargo,SallieMae,Discover,etc.)ratherthanthefederalgovernment
• Generally,youwillnothavealoanservicer–youwilldealdirectlywiththelenderwhenitcomestorepayment
• Nocentralizedrecord-keepingsystem–WillnotappearonNSLDS• Checkyourcreditreportandyourpersonalrecordsifyouare
unsureaboutyourlenderand/orloanstatus**Pleasenote–PrivateloansareNOTeligibleforfederalloanrepaymentopDonsnorforfederalloanforgiveness!To-DoItems-
• Setupanonlineaccountwitheachofyourlenders(ifavailable)• KeepyourcontactinformaDoncurrent!
BASICSO
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TWhendoIhavetostartpayingbackmyloans?• Federalloanshave“graceperiods”thatbeginabergraduaDon(oradrop
belowhalf-Dmeenrollment)• Duringagraceperiod,youarenotrequiredtomakepayments• However–interestconDnuestoaccrueforUnsubsidized&PLUSloans
• Graceperiodlengths• DirectLoans(Subsidized,Unsubsidized):6months• PerkinsLoans:9months• HPSL,LDS:12months• SpecialnoteonPLUS:Technically,nograceperiod.However,youcan
optforanautomaDc6-monthdefermentwhenyouapply.
• NOTE:Privateloansgenerallydonotcarryagraceperiod.YoumayhavetostartrepayingimmediatelyabergraduaDon.Checkthetermsofyourloanand/orcontactyourlenderifyou’reunsureofyourrepaymentterms.
BASICSO
FLOANR
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THowdoesrepaymentwork?• Generally,yourservicerwillcontactyouwhenyou’reapproachingtheendof
yourgraceperiod
• Youdon’thavetowaitforservicercontacttostartmakingpaymentsortochoosearepaymentplan–Youcan(andshould!)talktoyourserviceraboutopDonsearly
IMPORTANT!Evenifyourservicerdoesn’tcontactyouaboutrepayment,youaresAllresponsibleformakingpaymentsonAme.It’sonyoutoknowwhenrepaymentstartsandwhenpaymentsaredue.• Youneedtochoosearepaymentplanduringyourgraceperiod,unlessyouplan
tofollowtheStandard(default)plan
• Tip!SetupautomaDcdebitforyourloanpayments.Yougeta0.25%interestratededucDonfordoingso.
LOANR
EPAYMEN
TPLAN
SFederalStudentLoanRepaymentPlans
BasedonDebt BasedonIncome
Standard
Extended
Graduated
Income-ConDngent
RevisedPAYE
PayAsYouEarn
Income-Based
NON-IN
COMEB
ASEDREPAYM
ENTP
LANS
PlansBasedonDebt/NotBasedonIncome
• ForborrowerswhowanttheirdebtpaidoffinacertainamountofDmeand/ordon’twanttheirincometakenintoconsideraDonwhencalculaDngthemonthlypaymentamount
StandardPlan
• Defaultplan–Allborrowersenterthisplanunlesstheyselectanother• Fixedmonthlypaymentsfora10-yearrepaymentperiod• Highmonthlypaymentsbutlowestamountofinterestpaid• GoodopDonforborrowerswhocanaffordthepaymentsandwanttheir
debtgoneintheshortestamountofDmeGraduatedPlan
• Paymentsstartlowandincreasethroughoutthe10-yearrepaymentterm• Borrowerwillpaymoreinterest,&thereforehaveahigherpayoffamount• GoodopDonforborrowerswhostartoutwithalowincomebutanDcipate
increasedincome
NON-IN
COMEB
ASEDREPAYM
ENTP
LANS
PlansBasedonDebt/NotBasedonIncome(cont.)
ExtendedPlans-FixedorGraduated
• EssenDally,longertermversionsoftheStandardandGraduatedplans• BorrowermusthaveaDirectLoanbalanceof$30,000ormoreto
qualify• Borrowerpaysafixedorgraduatedpaymentover25years• Borrowerwillpaymoreinterest,andthereforehaveahigherpayoff
amount• GoodopDonforborrowerswhowantalowermonthlypayment
withoutpursuinganincome-basedrepaymentplanorconsolidaDon
NON-IN
COMEB
ASEDREPAYM
ENTP
LANS
ComparisonofNon-IncomeBasedRepaymentPlans(StudentLoans.govRepaymentEsDmator)
• AssumpDons• Totaldebt:$170,043(averagedebtofUFCVMclassof2016)
• $136,034unsubsidizedloans(80%oftotaldebt)• $34,039GradPLUSloans
• Justenteredrepayment• Note:Noloanforgiveness.ThepurposeoftheseplansistopayoffyourenDre
balanceinacertainamountofDme-sothereisnothinglebtoforgive
INCO
ME-D
RIVENREPAYM
ENTP
LANS
Income-DrivenRepaymentPlans
Undertheseplans,themonthlypaymentamountisdeterminedbasedontheborrower’s(andhis/herspouse’s,insomecases)income
Considera5onsforanIDRPlan
*Note–Paymentsmaybeaslowas$0underanIDRplan.Thesedocountasqualifyingpaymentstowardforgiveness(bothPSLFandotherwise).
INCO
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ENTP
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WhoShouldConsideranIDRPlan?
• IDRplansaregenerallythebestopDonforborrowerswhohaveahighloandebtrelaDvetotheirincome
• Borrowersmustgiveseriousthoughttotheirrepaymentpriori=es• IDRplansdogiveyoulowermonthlypayments–butwillaccruemore
interestoverDme,thuscreaDngamuchhigherpayoffamount• You’llbemakingpaymentsforupto25years• Remainingloanbalanceisforgivenaber20-25years
• Theforgivenamountisconsideredtaxableincome!• MustbeinanIDRplantoqualifyforPSLF
• ALWAYSdoresearchandtalktoyourservicerbeforechoosingaplan!ThebestopDonforeachindividualborrowerisverymuchbasedonhis/herownpersonalsituaDon.
• YoumustapplyiniDallyforanIDRplan–viaStudentLoans.gov(electronic)oryourservicer(paper)–andprovideincomedocumentaDon
• YoumustalsorecerDfyyourincomeandhouseholdsizeannually
INCO
ME-D
RIVENREPAYM
ENTP
LANS
Income-Con5ngentRepayment(ICR)Plan
• AllDirectLoanseligible• Allborrowerswitheligibleloansqualify(aparDculardebt-to-incomeraDo
isnotrequired)• Monthlypaymentisthelesserof:20%ofdiscreDonaryincome;orthe
amountyouwouldpayona12-yearrepaymentplanwithfixedpayments,adjustedaccordingtoyourincome• Paymentsrecalculatedeveryyearbasedonupdatedincome,family
size,andthetotalamountofyourDirectLoans• NOTE:Thereisnocaponthepaymentamount.Youcouldendup
withahigherpaymentthanyouwouldhaveundertheStandardplan!
• Ifmarried–Yourspouse’sincomeandloandebtaretakenintoconsideraDonifyoufileajointtaxreturnorchoosejointrepaymentofyourandyourspouse’sDirectLoans
• Aber25yearsofpayments,anyremainingloanbalanceisforgiven• Theforgivenamountisconsideredtaxableincome
INCO
ME-D
RIVENREPAYM
ENTP
LANS
Income-BasedRepayment(IBR)Plan
• AllDirectLoanseligible(exceptParentPLUSandConsolidaDonLoansthatincludeParentPLUS)
• MusthaveahighdebtrelaDvetoincometoqualify(“parDalfinancialhardship”)
• Monthlypayments=10-15%ofdiscreDonaryincome• Paymentsrecalculatedeveryyearbasedonupdatedincomeandfamily
size• PaymentAmountCap–You’llneverpaymorethanyouwouldunder
theStandardplan• Ifmarried–Yourspouse’sincomeandloandebtaretakeninto
consideraDonwhendeterminingyourAGIonlyifyoufileajointtaxreturn• Aber25yearsofpayments,anyremainingloanbalanceisforgiven
• Theforgivenamountisconsideredtaxableincome*Note–IfyouleavetheIBRplan,youwillbeplacedontheStandardplan.Youmustmake1paymentundertheStandardplan(orrequestareduced-paymentforbearance)beforeyoucanswitchtoanotherrepaymentplan.
INCO
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PAYE(PayAsYouEarn)Plan
• VerysimilareligibilityrequirementsasIBR,includingparDalfinancialhardship• Keydifference-
• ONLYavailabletoindividualswhowere“newborrowers”onoraber10/1/07andreceivedadisbursementofaDirectLoanonoraber10/1/11
• Monthlypayments=10%ofdiscreDonaryincome• Paymentcapdoesapply–paymentswillneverbehigherthanthey
wouldbeundertheStandardplan• Forgivenessoccursaber20yearsofpayments
• Theforgivenamountisconsideredtaxableincome
INCO
ME-D
RIVENREPAYM
ENTP
LANS
REPAYE(RevisedPayAsYouEarn)Plan
• Opentoanyborrowerwitheligiblefederalstudentloans• Nofinancialrequirements
• Monthlypayments=10%ofdiscreDonaryincome• NOTE:Thereisnocaponthepaymentamount.Youcouldendup
withahigherpaymentthanyouwouldhaveundertheStandardplan!
• Paymentsrecalculatedeveryyearbasedonupdatedincomeandfamilysize
• Ifmarried–Yourspouse’sincomeandloandebtisconsideredregardlessofwhetheryoufilejointlyorseparately(withlimitedexcepDons)
• Forgivenessoccursaber25yearsofpayments• Theforgivenamountisconsideredtaxableincome
COMPARISO
NOFA
LLREPAYM
ENTP
LANS
SingleborrowerresidinginFloridaTotalloandebt$170,034StarAngsalary$67,535*
*PerAVMAMarketResearchSta=s=csforClassof2013(mostrecentavailable)
OTHERFEDERALR
EPAYMEN
TOPTIO
NS
ConsolidaAonLoan• Combinesallfederalloansintoasinglenewloan
• EssenDally,allyourloansarepaidoff,andtheirbalanceistransferredintotheConsolidaDonloan
• Establishesnewinterestrate,repaymentschedule,andterms• Interestrate=weightedaverageoftheunderlyingloans’interest
ratesroundeduptothenext1/8of1%• AllfederalrepaymentplansmaybeusedforrepayingaConsolidaDonloan• Benefits:Couldprovideborrowerwithalowermonthlypayment&
qualifiesforPSLF• Remember–PrivateloanscannotbeincludedinafederalconsolidaDon
loan!Deferment/Forbearance
• Bothtemporarilypostponepaymentsforborrowerswhomeeteligibilityrequirements
• InterestdoessDllaccrue!(Exceptforsubsidizedloansindeferment)• Availableforvariouscircumstances–Contactyourservicertofindoutif
youqualify
PUBLICSERVICELO
ANFORGIVEN
ESSWhatisPublicServiceLoanForgiveness(PSLF)?
AborrowerqualifiesiftheymeetALLofthefollowingcondiDons:
(1)Makes120qualifyingpayments(2)Underaqualifyingrepaymentplan
(3)WhilebeingemployedfullDmebyaqualifyingemployer
• Keypoints• QualifyingpaymentsdonothavetobeconsecuDve• AllIDRplansqualify–Standard,Extended,&Graduateddonot• Qualifyingemployersgenerallyaregovernmentagenciesand501(c)(3)
nonprofits• PSLFEmploymentCerDficaDonform
• Notrequiredbuthighlyrecommended–Availablefromservicer• Servicerwillevaluateifyouremploymentqualifiesandtrackpayments• SolelyhandledbyFedLoanServicing
• Aber120thqualifyingpayment,youMUSTapplyforloanforgiveness–notautomaDcallygranted
• TheforgivenamountisNOTtaxableandthereisnocaponhowmuchcanbeforgivenßBiggestbenefitofPSLF
Note–Futureofprogramisunknown.Majorchangesorevenfullrepealcouldoccur.Staytuned!
REPAYM
ENTU
NDERPSLF
SingleborrowerresidinginFloridaTotalloandebt$170,034StarAngsalary$52,400*
*PerAVMAMarketResearchSta=s=cs–Star=ngsalaryatanon-profitforClassof2013graduates
VETERIN
ARYMEDICIN
ELOANR
EPAYMEN
TPRO
GRAM
VeterinaryMedicineLoanRepaymentProgram(VMLRP)haps://nifa.usda.gov/program/veterinary-medicine-loan-repayment-program
• OfferedbytheUSDANaDonalInsDtuteofFoodandAgriculture(NIFA)
• Paysupto$25,000peryeartowardveterinarians’educaDonalloans• Onlypaystowardloansincurredinvetschool• Privateloansgenerallyqualify(checkeligibilitycriteria)• Musthaveloandebtof$15,000ormore
• MustagreetoworkinaNIFA-designatedshortageareafor3years
• MaypotenDallyreceiveloanrepaymentforlongerthan3years–checkwithprogram
• ApplicaDonsgenerallyopeninthespringeachyear
• Keyeligibilitycriteria• MustholdaDVMdegree• MustbeaU.S.ciDzen,naDonal,orpermanentresident• CannotoweveterinaryservicetoanyotherenDty(e.g.,military)
REFEREN
CESAVMA-hvps://www.avma.org/KB/Resources/StaDsDcs/Pages/Market-research-staDsDcs-First-year-employment.aspxFedLoanServicingwebinar:“Income-DrivenRepaymentPlans”(originallypresented10/06/2016)FederalStudentAidwebinar:“FederalStudentLoanRepaymentPlansandtheRepaymentEsDmator”(originallypresented06/02/2016)FederalStudentAid–hvps://studentaid.ed.gov/sa/repay-loans/understand/planshvps://studentaid.ed.gov/sa/repay-loans/forgiveness-cancellaDon/public-servicehvps://studentaid.ed.gov/sa/sites/default/files/income-driven-repayment-q-and-a.pdfhvps://studentaid.ed.gov/sa/repay-loansGreatLakesSmartSessionswebinar:“NewProfessionalsWebinar:FundamentalsoftheFederalLoanProgram”(originallypresented10/26/2016)NASFAAwebinar:“NASFAAPolicyUpdate”(originallypresented12/6/2016)USDANIFA-hvps://nifa.usda.gov/program/veterinary-medicine-loan-repayment-program
NEEDM
OREH
ELP?
AngelaMooreFinancialAidCoordinatorDentalTower,[email protected](352)273-5999
QuesAons?
OfficeHours:8:00-4:30Monday-Friday
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I’mhereforyou!